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Overtime Issue Lives, Acosta Says

Alexander Acosta

U.S. Secretary of Labor Alexander Acosta offered a glimpse of the direction his department is heading during a recent hearing before a House of Representatives committee.

While the Obama Administration’s overtime rule is dead following a successful legal challenge by employer groups, Acosta said he is looking at possible alternatives.

On Aug. 31, a U.S. District Court judge granted summary judgment overturning the overtime final regulations, holding that in the process of setting the new salary level, the department exceeded its statutory authority.

On Oct. 30, the Justice Department, on behalf of DOL, appealed this decision to a federal appeals court. The Justice Department also asked appeals court to hold the appeal in abeyance while DOL pursues further rulemaking to determine the appropiate salary level.

Acosta told Congress some aspects of the overtime rule may deserve a fresh initiative, including the possibility of raising the $23,660 annual salary threshold for exempt managers adopted in 2004 which he said is probably too low now.

“Life has become much more expensive,” he noted, adding that the Obama era attempt to raise the exempt salary threshold to more than $47,000 a year would have “created a shock to the system.”

As a result, his department is in the process of reviewing around 200,000 comments that it received while the earlier rule was under development.

Acosta said his department believes it was clear from the court’s earlier ruling that the DOL has the legal authority to establish a reasonable salary threshold. In spite of that assertion he conceded that court’s decision “could be read as less than clear.”

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